Lessee under Government Grants Act has no right to transfer leasehold land granted to him by Govt., without fulfilling conditions stipulated in lease deed, rules Top Court

Read Judgment: Hardev Singh & Ors. V. Prescribed Authority, Kashipur & Anr. 

Panaj Bajpai

New Delhi, January 12, 2022: While stating that that the provisions of the U.P Imposition of Ceiling on Land Holdings Act, 1960 would be applicable in case of grantee of Government under a lease agreement, the Supreme Court has opined that such grantee being a lessee from the Government has no right to transfer the land without fulfilling the conditions stipulated in the lease deed.

A Division Bench of Justice S. Abdul Nazeer and Justice Krishna Murari observed that any transfer of land by the Government Lessee is subject to fulfillment of the conditions of the government lease and sub-lease, and non-compliance of the conditions and transfer made without fulfilling the conditions of the Govt. Grant, would be void. 

Going by the background of the case, the Secretary of State for India executed a lease deed dated August 25, 1920 under the Government Grants Act, 1895 in favour of one Lala Khushi Ram. On the demise of Khushi Ram, the leasehold rights were inherited by ‘Harikishan Lal’ (second Respondent – Successor), who executed a registered sub-lease for agricultural purposes of an area measuring 2.49 acres in favour of Hardev Singh & Others (Appellants). 

Later, the Prescribed Authority, Kashipur (first Respondent), issued a notice u/s 10(2) of the Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960 to second Respondent (Government Lessee), proposing to declare certain area of land held by him as surplus. Owing to same, the land declared surplus included the land sub-let to the appellant by second Respondent.

Accordingly, the appellant made an application u/s 11(2) of the Act of 1960, which came to be dismissed by the first Respondent on the ground that the appellant had no locus to maintain the said application. After remand, the Prescribed Authority again dismissed the application observing that the possession of the appellant over the land in question was not reflected in the revenue records and the conditions postulated in the lease deed for transfer of land or portion thereof by the Government Lessee were not followed before creating a sub-lease in favour of appellant. 

During the pendency of the writ before the High Court of Judicature at Allahabad, State of Uttaranchal came into existence and since the land in question fell within the territorial jurisdiction of the newly created High Court for Uttaranchal, the petition was transferred there and eventually got dismissed. The High Court in the impugned common order though observed that the appellants herein being sub-lessees would be tenure holder as per sub-Section 9(3) of the Ceiling Act but refused to extend the benefit to the appellant in view of violation of the conditions specified by Clause 9 of the Lease Deed.

After considering the submissions, the Apex Court found that the very purpose behind enactment of the Ceiling Act is to prescribe a ceiling limit on the area of land held by a ‘tenure holder’ for the purpose of securing the interest of the community at large to ensure increased agricultural production and to provide land for landless agricultural labourers with a view to have equitable distribution of land. 

The terms of the grant showed that 4805 acres of land situated in Pargana Bazpur, District Nainital, were leased out to the Government Lessee, and condition No. 9 of the Grant laid down the conditions to be fulfilled in the event of lessee transferring the lease land or a portion thereto except transfer by way of an inheritance, added the Court.

The Top Court also highlighted that the grantee was only allowed to transfer the land on fulfillment of the conditions and even the terms of the sub-lease specifically provided that if the sub-lessee intends to purchase the full rights of the Government Lessee thereby himself acquiring the status of an independent tenure holder, he could do so in conformity with Clause 9 of the Government lease within a period of five years from the date of sub-lease on the payment of rent so fixed. 

Speaking for the Bench, Justice Murari noted that as the sub-lease executed for ordinary course of agriculture cannot be treated as transfer for want of compliance of the conditions enumerated in the Clause of the Govt. Grant itself, hence, the appellants in their capacity as sub-lessee shall not acquire the status of an independent tenure holder. 

Thus, the appellant being a sub-lessee continued to be an ostensible holder of land and the second Respondent (government grantee) continued to be the real holder and the ceiling authorities as well as the High Court had rightly dismissed the claim of the appellant, concluded the Bench.